HELSINKI, Aug. 3, 2023 /PRNewswire/ -- Outokumpu has made solid progress in the second phase of its strategy where the focus has been on strengthening the core of the company. Simultaneously, Outokumpu has begun preparations for the third phase of its strategy, which will start in 2026 and most likely require new investments. The company's focus in this phase will be to strengthen its market position further and develop more globally diversified operations including Americas expansion, European competitiveness, value-chain integration, and sustainability leadership along with the possible biocoke investment.
In recent years, Outokumpu has significantly improved its operational performance and ability to generate profit in business area Americas. This development is supported by the fact that the U.S. Government has enacted legislation and made regulatory improvements that have significantly incentivized investment in the U.S. Outokumpu commends federal, state, and local government leaders for promoting policies that strengthen the U.S. steel market against unfair international competition, promote investment in clean technology, maintain a stable and robust economy, and train and empower workforce, which remains the backbone of Outokumpu's operations in Americas.
As part of these phase three preparations Outokumpu is conducting a feasibility study to explore options to expand its U.S. operations to meet the increasing demand for locally produced sustainable stainless steel, which contributes to a strong U.S. manufacturing and defence industrial base. Specifically, Outokumpu is seeking to increase its existing cold rolling capacity and investigating different options for its hot rolling arrangements in Calvert, Alabama. With respect to the latter, one option under consideration for the company is to build its own hot rolling mill. Outokumpu is in a good state of readiness to make a final investment decision and will communicate separately if such a decision is made. As disclosed in Outokumpu's annual reports, the company has certain critical supplier dependencies. Currently, in the U.S., Outokumpu procures its hot rolling services from an external party under an agreement valid until 2036 unless earlier terminated by either party with 36 months' notice. The earliest effective date of any potential termination of the agreement, following the required notice period, would be October 1, 2026.
"We have successfully turned around our business in the U.S. in recent years and our profitability has improved significantly," says CEO Heikki Malinen. "As a result of operational and commercial developments, the strong market environment, and the support of favourable federal, state, and local policies by elected officials in Alabama, we have been able to deliver solid results on a consistent basis."
Outokumpu has a strong market position in its key markets – the company is the number one stainless steel producer in Europe and a close second producer in the U.S. market.
"We are committed to the U.S. and broader North American markets for the long term and are exploring options as we seek to increase the capacity in our Calvert mill in Alabama. As the U.S.'s second largest stainless steel producer, our goal is to find the best possible solution to achieve our commercial ambitions in North America," says Malinen.
Outokumpu's financial targets and dividend policy remain unchanged.
For more information:
Investors: Linda Häkkilä, Head of Investor Relations, tel. +358 400 719 669
Media: Päivi Allenius, VP – Communications, tel. +358 40 753 7374 or Outokumpu media desk, tel. +358 40 351 9840
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SOURCE Outokumpu Oyj
